Top 5 Execution Venues/Brokers & Annual Qualitative Report FOR INFORMATION PURPOSES ONLY. Issued by Dimensional Fund Advisors Ltd. (DFAL), 20 Triton Street, Regent s Place, London, NW1 3BF. DFAL is authorised and re gulated by the Financial Conduct Authority (FCA). Names and trademarks of third-party companies are owned by those companies. Nothing in this report is intended to be nor should be construed as an endorsement or recommendation of any service, vendor, or product by Dimensional.
Class of Instrument 1 Notification if <1 average trade per business day in the previous year 2 Equities Shares and Depositary Receipts N Top five brokers or execution venues ranked in terms of trading volumes (descending order) 3 Proportion of volume traded as a percentage of total in that class 4 Proportion of orders executed as percentage of total in that class 5 Percentage of directed orders 6 Instinet - 213800MXAKR2LA1VBM44 25% 23% 0% Jefferies - S5THZMDUJCTQZBTRVI98 24% 19% 0% Société Générale - O2RNE8IBXP4R0TD8PU41 22% 18% 0% Investment Technology Group - 213800EEC95PRUCEUP63 17% 21% 0% Virtu Financial, Inc - 549300XG5LFGN1IGYC71 7% 15% 0% 1. Class of Instrument according to RTS 28 Appendix 1. Equities are not subdivided by tick size in the 2018 report, due to the introduction of the tick size regime in January 2018 2. Whether or not there w ere on average less than one trade a day in this instrument class. Logic = Total no. trades/250. 3. Venue of transmission. No aggressive or passive order columns are included as they are not relevant for the firm s trading. 4. Notional of trades w ithin that class of instrument e.g. Notional of all trades w ith Broker X/Total Notional of trades. 5. Number of allocations within that class of instrument e.g. Number of allocations with Broker X/Total Number of allocations. 6. Percentage of trades w ith that counterparty considered by the firm to be Directed Orders ( Directed Order is defined as an order where a specific execution venue was specified by the client prior to the ex ecution of the order). 1
Class of instrument General observations Equities Shares and Depositary Receipts Dimensional Fund Advisors Ltd. (the Firm ) seeks to take all sufficient steps to obtain the best possible result for clientson a consistent basis, taking into account relevant execution factors. It is the Firm s policy that best execution obligations should be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular instrument classes. The Firm seeks to monitor the effectiveness of its order execution policy and arrangements and assess, on a regular basis, whether the execution venues listed in such policy provide for the best possible result for the client or whether changes to execution arrangements are required, taking account of, among other things, the information on execution quality published by the execution venues. The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes. In respect of transactions in financial instruments falling within this instrument class, the Firm uses brokers but does not use execution venues. The quality of execution obtained for this instrument class during the period, including by those brokers disclosed in the top five list above, has been reviewed and determined to have been in line with the Firm s expectations and carried out in accordance with the Firm s best execution policy and procedures ( Best Execution Policy ). Execution factors As outlined in the Firm s Best Execution Policy, the relative importance of execution factors in respect of this instrument class were determined as follows: 1. Price 2. Costs The remaining execution factors speed, likelihood of execution and settlement, order size, nature of order, and any other consideration relevant to the execution of the order are generally given equal ranking. When executing a client order, the relative importance of the execution factors must be determined by reference to the following execution criteria: (1) The characteristics of the client including the categorisation of the client (e.g. as professional); (2) The characteristics of the client order (e.g. size), including where the order involves a securities financing transaction; (3) The characteristics of the financial instrument that are subject to the order; (4) The characteristics of the brokers and/or execution venues to which that order can be directed; and (5) In the Firm s capacity as a UCITS management company, the objectives, investment policy and risks specific to the UCITS as indicated in the schemes prospectus or instrument constituting such funds. The execution factors relied on in respect of this instrument class were in line with the Firm s Best Execution Policy. 2
Close links, conflicts of interest and common ownership with respect to execution venues / brokers Close links The Firm has no close links to report. Conflicts of interest General Disclosure The Firm recognises that conflicts of interest in the trading process can have a direct impact on best execution. Conflicts of interest can arise in the following areas, among others: Payment for research; Consumption of other services from counterparties; Compensation and promotion incentives that reward traders authorised by the Firm ( Authorised Persons ) based on volume or size of trades; Proprietary trading and personal trading; Sales consideration for trade flow; Broker-dealer affiliations; Gifts and entertainment; and Authorised Persons relationships with counterparties. Close links Conflicts of interest The Firm does not believe the potential identified conflicts of interest influenced the quality of execution obtained by the Firm. The Firm seeks to prevent or manage conflicts in accordance with the Firm s Conflicts of Interest Policy. Broker selection was made in accordance with the Firm s Best Execution Policy. In particular, allocation of brokerage decisions was made consistently with the Firm s duty to seek best execution and not in view of sales or recommendations of the Firm s funds, strategies or services or any other services that a broker or its affiliates may provide to the Firm, its affiliates or the funds / accounts they manage. To minimize the potential impact of conflicts of interest, the Firm has, among other things, implemented the following: The Firm does not accrue soft dollar credits to purchase third party research; The Firm does not allow compensation and promotion incentives that reward Authorised Persons based on the volume or size of trades; Proprietary and personal trading is addressed in the Firm s compliance manual, and personal trades in restricted securities must be pre-cleared by Compliance; Authorised Persons are not permitted to consider sales of funds or investment advisory business when allocating trades to broker / dealers; The Firm does not have an affiliated broker/dealer other than DFA Securities LLC, a limited purpose broker/dealer that only serves as principal underwriter and distributor to US domiciled funds; The Firm s Global Code of Ethics and Standard of Conduct addresses the receipt of gifts and entertainment by Firm personnel; Authorised Persons relationships with counterparties must be disclosed to Compliance and monitored on an ongoing basis; and The Committee will periodically seek to identify potential conflicts of interest with approved broker / dealers and review execution received from such broker / dealers. 3
Close links, conflicts of interest and common ownership with respect to execution venues / brokers Conflicts of interest Instrument Class-specific Disclosure In addition, the following potential conflicts of interest have been identified in respect of approved execution venues / brokers for this instrument class: Accounts and/or funds managed by the Firm may hold an interest in approved brokers or their affiliates, including, but not limited to, Investment Technology Group, Instinet, Société Générale and Virtu Financial, Inc. The Firm or its affiliates may act as advisor or subadvisor to accounts managed by approved brokers or their affiliates, including, but not limited to, Instinet. Approved brokers and/or their affiliates may invest in accounts and/or funds managed by the Firm or its affiliates. Approved brokers and/or their affiliates may provide certain other services (aside from brokerage services) to the Firm and/or its affiliates and/or the accounts / funds managed by the Firm or its affiliates. Certain approved brokers may have customised their technology to facilitate the Firm s trading process, including, but not limited to, Investment Technology Group, Instinet and Jefferies. Common ownerships The Firm has no common ownership to report. Common ownerships 4
Specific arrangements with execution venues / brokers regarding payments made or received, discounts, rebates or non-monetary benefits received The Firm has no specific payment arrangements to report under the requirements applicable during the disclosure period (Note: MiFID II inducements rules were not in effect during the disclosure period). The Firm evaluated payment arrangements in accordance with the requirements applicable during the disclosure period. Factors leading to a change in the list of execution venues / brokers listed in the order execution policy during the disclosure period as MiFID II rules were not yet in effect. The changes to the list of execution venues / brokers as a result of MiFID II will be reflected in the 2018 report. Differentiation across client categories Use of data / tools relating to quality of execution the Firm gives effect to decisions to deal on behalf of professional clients only (as defined in the FCA rules). The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes, utilising internally developed and third party analytical tools and services. Reviews are conducted on explicit and implicit transaction costs. Reports from internal working groups that conduct additional transactional cost analysis throughout the year are also reviewed. The results of this analysis have proved to be in line with the Firm s expectations. Use of consolidated tape provider output Use of DEA The Firm has not used output from consolidated tape providers. 5
Class of Instrument 1 Notification if <1 average trade per business day in the previous year 2 Debt Instruments Bonds and Money Market Instruments N Top five brokers or execution venues ranked in terms of trading volumes (descending order) 3 Proportion of volume traded as a percentage of total in that class 4 Proportion of orders executed as percentage of total in that class 5 Percentage of directed orders 6 TradeWeb UK - TREU 22% 20% 0% Royal Bank of Scotland PLC - RR3QWICWWIPCS8A4S074 7% 5% 0% HSBC Bank PLC London - MP6I5ZYZBEU3UXPYFY54 6% 6% 0% The Toronto-Dominion Bank - PT3QB789TSUIDF371261 5% 4% 0% RBC Europe Limited - TXDSU46SXBWIGJ8G8E98 5% 6% 0% 1. Class of Instrument according to RTS 28 Appendix 1. 2. Whether or not there w ere on average less than one trade a day in this instrument class. Logic = Total no. trades/250. 3. Venue of transmission. No aggressive or passive order columns are included as they are not relevant for the firm s trading. 4. Notional of trades w ithin that class of instrument e.g. Notional of all trades w ith Broker X/Total Notional of trades. 5. Number of allocations within that class of instrument e.g. Number of allocations with Broker X/Total Number of allocations. 6. Percentage of trades w ith that counterparty considered by the firm to be Directed Orders. 6
Class of instrument General observations Debt Instruments Bonds and Money Market Instruments The Firm seeks to take all sufficient steps to obtain the best possible result for clients on a consistent basis, taking intoaccount relevant execution factors. It is the Firm s policy that best execution obligations should be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular instrument classes. The Firm seeks to monitor the effectiveness of its order execution policy and arrangements and assess, on a regular basis, whether the execution venues listed in such policy provide for the best possible result for the client or whether changes to execution arrangements are required, taking account of, among other things, the information on execution quality published by the execution venues. The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes. In respect of transactions in financial instruments falling within this instrument class, the Firm uses brokers and executionvenues. The quality of execution obtained for this instrument class during the period, including by those brokers and execution venues disclosed in the top five list above, has been reviewed and determined to have been in line with the Firm s expectations and carried out in accordance with the Firm s Best Execution Policy. Execution factors As outlined in the Firm s Best Execution Policy, the relative importance of execution factors in respect of this instrument class were determined as follows: 1.Price 2.Costs The remaining execution factors speed, likelihood of execution and settlement, order size, nature of order, and any other consideration relevant to the execution of the order are generally given equal ranking. When executing a client order, the relative importance of the execution factors must be determined by reference to the following execution criteria: (1) The characteristics of the client including the categorisation of the client (e.g. as professional); (2) The characteristics of the client order (e.g. size), including where the order involves a securities financing transaction; (3) The characteristics of the financial instrument that are subject to the order; (4) The characteristics of the brokers and/or execution venues to which that order can be directed; and (5) In the Firm s capacity as a UCITS management company, the objectives, investment policy and risks specific to the UCITS as indicated in the schemes prospectus or instrument constituting such funds. The execution factors relied on in respect of this instrument class were in line with the Firm s Best Execution Policy. 7
Close links, conflicts of interest and common ownership with respect to execution venues / brokers Specific arrangements with execution venues / brokers regarding payments made or received, discounts, rebates or non-monetary benefits received Close links The Firm has no close links to report. Conflicts of interest Please see section headed General Disclosure under Equities Shares and Depositary Receipts above. In addition, the following potential conflicts of interest have been identified in respect of approved execution venues / brokers for this instrument class: Accounts and/or funds managed by the Firm may hold an interest in approved brokers or their affiliates, including, but not limited to, TradeWeb UK, Royal Bank of Scotland PLC, HSBC Bank PLC London, The Toronto-Dominion Bank and RBC Europe Limited. The Firm or its affiliates may act as advisor or subadvisor to accounts managed by approved brokers or their affiliates. Approved brokers and/or their affiliates may invest in accounts and/or funds managed by the Firm or its affiliates. Approved brokers and/or their affiliates may provide certain other services (aside from brokerage services) to the Firm and/or its affiliates and/or the accounts / funds managed by the Firm or its affiliates, including but not limited to, RBC Europe Limited. Certain approved brokers may have customised their technology to facilitate the Firm s trading process. Common ownerships The Firm has no common ownership to report. The Firm has no specific payment arrangements to report under the requirements applicable during the disclosure period (Note: MiFID II inducements rules were not in effect during the disclosure period). Close links Conflicts of interest The Firm does not believe the potential identified conflicts of interest influenced the quality of execution obtained by the Firm. The Firm seeks to prevent or manage conflicts in accordance with the Firm s Conflicts of Interest Policy. Broker selection was made in accordance with the Firm s Best Execution Policy. In particular, allocation of brokerage decisions was made consistently with the Firm s duty to seek best execution and not in view of sales or recommendations of the Firm s funds, strategies or services or any other services that a broker or its affiliates may provide to the Firm, its affiliates or the funds / accounts they manage. Common ownerships The Firm evaluated payment arrangements in accordance with the requirements applicable during the disclosure period. 8
Factors leading to a change in the list of execution venues / brokers listed in the order execution policy Differentiation across client categories Use of data / tools relating to quality of execution during the disclosure period as MiFID II rules were not yet in effect. The changes to the list of execution venues / brokers as a result of MiFID II will be reflected in the 2018 report. the Firm gives effect to decisions to deal on behalf of professional clients only (as defined in the FCA rules). The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes, utilisinginternally developed and third party analytical tools and services. Reviews are conducted on explicit and implicit transaction costs. Reports from internal working groups that conduct additional transactional cost analysis throughout the year are also reviewed. The results of this analysis have proved to be in line with the Firm s expectations. Use of consolidated tape provider output The Firm has not used output from consolidated tape providers. Use of DEA 9
Class of Instrument 1 Notification if <1 average trade per business day in the previous year 2 Currency Derivatives Forwards N Top five brokers or execution venues ranked in terms of trading volumes (descending order) 3 Proportion of volume traded as a percentage of total in that class 4 Proportion of orders executed as percentage of total in that class 5 Percentage of directed orders 6 Dimensional Fund Advisors LP* - S31KDR2I4VDC432ELJ36 99% 63% 0% FXAll - FXAL <1% 12% 0% FX Connect -MFXC <1% 23% 0% Credit Suisse AG -ANGGYXNX0JLX3X63JN86 <1% 1% 100% DFA Australia Limited* - 549300NN516DPSX0IH86 <1% 1% 0% 1. Class of Instrument according to RTS 28 Appendix 1. 2. Whether or not there w ere on average less than one trade a day in this instrument class. Logic = Total no. trades/250. 3. Venue of transmission. No aggressive or passive order columns are included as they are not relevant for the firm s trading. 4. Notional of trades w ithin that class of instrument e.g. Notional of all trades w ith Broker X/Total Notional of trades. 5. Number of allocations within that class of instrument e.g. Number of allocations with Broker X/Total Number of allocations. 6. Percentage of trades w ith that counterparty considered by the firm to be Directed Orders. * Reflects orders transmitted to an investment advisor affiliate which then placed these orders with third party brokers or execution venues 10
Class of instrument General observations Currency Derivatives - Forwards The Firm seeks to take all sufficient steps to obtain the best possible result for clients on a consistent basis, taking intoaccount relevant execution factors. It is the Firm s policy that best execution obligations should be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular instrument classes. The Firm seeks to monitor the effectiveness of its order execution policy and arrangements and assess, on a regular basis, whether the execution venues listed in such policy provide for the best possible result for the client or whether changes to execution arrangements are required, taking account of, among other things, the information on execution quality published by the execution venues. The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes. In respect of transactions in financial instruments falling within this instrument class, the Firm uses brokers and executionvenues. The Firm may also transmit orders to its investment advisory affiliates for them to place the orders with third-party brokers or execution venues. The quality of execution obtained for this instrument class during the period, including by those brokers and execution venues disclosed in the top five list above, has been reviewed and determined to have been in line with the Firm s expectations and carried out in accordance with the Firm s Best Execution Policy. Execution factors As outlined in the Firm s Best Execution Policy, the relative importance of execution factors in respect of this instrument class were determined as follows: 1. Price 2. Costs 3. Likelihood of execution and settlement 4. Order size The remaining execution factors speed, nature of order, and any other consideration relevant to the execution of the order are generally given equal ranking. The execution factors relied on in respect of this instrument class were in line with the Firm s Best Execution Policy. When executing a client order, the relative importance of the execution factors must be determined by reference to the following execution criteria: (1) The characteristics of the client including the categorisation of the client (e.g. as professional); (2) The characteristics of the client order (e.g. size), including where the order involves a securities financing transaction; (3) The characteristics of the financial instrument that are subject to the order; (4) The characteristics of the brokers and/or execution venues to which that order can be directed; and (5) In the Firm s capacity as a UCITS management company, the objectives, investment policy and risks specific to the UCITS as indicated in the schemes prospectus or instrument constituting such funds. 11
Close links, conflicts of interest and common ownership with respect to execution venues / brokers Close links The Firm has the following close links with two ofthe entities identified: Dimensional Fund Advisors LP: Dimensional Fund Advisors LP is the parent undertaking of the Firm. DFA Australia Limited: DFA Australia Limited is a subsidiary undertaking of Dimensional Fund Advisors LP, the parent undertaking of the Firm. Conflicts of interest Please see section headed General Disclosure under Equities Shares and Depositary Receipts above. In addition, the following potential conflicts of interest have been identified in respect of approved execution venues / brokers for this instrument class: Accounts and/or funds managed by the Firm may hold an interest in approved brokers or their affiliates, including, but not limited to, Credit Suisse AG. The Firm or its affiliates may act as advisor or subadvisor to accounts managed by approved brokers or their affiliates, including, but not limited to, Credit Suisse AG, Dimensional Fund Advisors LP and DFA Australia Limited. Approved brokers and/or their affiliates may invest in accounts and/or funds managed by the Firm or its affiliates. Approved brokers and/or their affiliates may provide certain other services (aside from brokerage services) to the Firm and/or its affiliates and/or the accounts / funds managed by the Firm or its affiliates. Certain approved brokers may have customised their technology to facilitate the Firm s trading process. Common ownerships The Firm has the following common ownerships with two of the entities identified: Dimensional Fund Advisors LP: Dimensional Fund Advisors LP is the parent undertaking of the Firm. DFA Australia Limited: Dimensional Fund Advisors LP, the parent undertaking of the Firm is also the parent undertaking of DFA Australia Limited. Close links These close links did not influence the Firm s selection of brokers or execution venues, as the orders were placed by such entities with third party brokers or execution venues, and not executed by the entities listed. Conflicts of interest The Firm does not believe the potential identified conflicts of interest influenced the quality of execution obtained by the Firm. The Firm seeks to prevent or manage conflicts in accordance with the Firm s Conflicts of Interest Policy. Broker selection was made in accordance with the Firm s Best Execution Policy. In particular, allocation of brokerage decisions was made consistently with the Firm s duty to seek best execution and not in view of sales or recommendations of the Firm s funds, strategies or services or any other services that a broker or its affiliates may provide to the Firm, its affiliates or the funds / accounts they manage. Common ownerships These common ownerships did not influence the Firm s selection of brokers or execution venues, as the orders were placed by such entities with third party brokers or execution venues, and not executed by the entities listed. 12
Specific arrangements with execution venues / brokers regarding payments made or received, discounts, rebates or non-monetary benefits received Factors leading to a change in the list of execution venues / brokers listed in the order execution policy Differentiation across client categories The Firm has no specific payment arrangements to report under the requirements applicable during the disclosure period (Note: MiFID II inducements rules were not in effect during the disclosure period). during the disclosure period as MiFID II rules were not yet in effect. The changes to the list of execution venues / brokers as a result of MiFID II will be reflected in the 2018 report. the Firm gives effect to decisions to deal on behalf of professional clients only (as defined in the FCA rules). The Firm evaluated payment arrangements in accordance with the requirements applicable during the disclosure period. Use of data / tools relating to quality of execution The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes, utilisinginternally developed and third party analytical tools and services. Reviews are conducted on explicit and implicit transaction costs. Reports from internal working groups that conduct additional transactional cost analysis throughout the year are also reviewed. The results of this analysis have proved to be in line with the Firm s expectations. Use of consolidated tape provider output Use of DEA The Firm has not used output from consolidated tape providers. 13
Class of Instrument 1 Notification if <1 average trade per business day in the previous year 2 Equity Derivatives Futures admitted to trading on a trading venue Y Top five brokers and execution venues ranked in terms of trading volumes (descending order) 3 Proportion of volume traded as a percentage of total in that class 4 Proportion of orders executed as percentage of total in that class 5 Percentage of directed orders 6 Citigroup Global Markets Limited - XKZZ2JZF41MRHTR1V493 54% 59% 0% Dimensional Fund Advisors LP* - S31KDR2I4VDC432ELJ36 23% 28% 0% Goldman Sachs - W22LROWP2IHZNBB6K528 12% 6% 0% DFA Australia Limited* - 549300NN516DPSX0IH86 10% 6% 0% 1. Class of Instrument according to RTS 28 Appendix 1. 2. Whether or not there w ere on average less than one trade a day in this instrument class. Logic = Total no. trades/250. 3. Venue of transmission. No aggressive or passive order columns are included as they are not relevant for the firm s trading. Only four entities are listed as they represent 100% of the v olume traded. 4. Notional of trades w ithin that class of trade e.g. Notional of all Equity trades w ith Broker X/Total Notional of Equity trades. 5. Number of allocations within that class of trade e.g. Number of Equity allocations with Broker X/Total Number of Equity allocations. 6. Percentage of trades w ith that counterparty considered to be Directed Orders e.g. An order whose execution destination has b en decided by the client rather than the ex ecution desk. * Reflects orders transmitted to an investment advisor affiliate which then placed these orders with third party brokers or execution venues 14
Class of instrument General observations Equity Derivatives Futures admitted to trading on a trading venue The Firm seeks to take all sufficient steps to obtain the best possible result for clients on a consistent basis, taking intoaccount relevant execution factors. It is the Firm s policy that best execution obligations should be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular instrument classes. The Firm seeks to monitor the effectiveness of its order execution policy and arrangements and assess, on a regular basis, whether the execution venues listed in such policy provide for the best possible result for the client or whether changes to execution arrangements are required, taking account of, among other things, the information on execution quality published by the execution venues. The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes. In respect of transactions in futures admitted to trading on a trading venue, the Firm uses brokers, but does not use execution venues. The Firm may also transmit orders to its investment advisory affiliates for them to place the orders with third-party brokers. The quality of execution obtained for this instrument class during the period, including by those brokers disclosed in the top five list above, has been reviewed and determined to have been in line with the Firm s expectations and carried out in accordance with the Firm s Best Execution Policy. Execution factors As outlined in the Firm s Best Execution Policy, the relative importance of execution factors in respect of this instrument class were determined as follows: 1. Price 2. Costs The remaining execution factors speed, likelihood of execution and settlement, order size, nature of order, and any other consideration relevant to the execution of the order are generally given equal ranking. When executing a client order, the relative importance of the execution factors must be determined by reference to the following execution criteria: (1) The characteristics of the client including the categorisation of the client (e.g. as professional); (2) The characteristics of the client order (e.g. size), including where the order involves a securities financing transaction; (3) The characteristics of the financial instrument that are subject to the order; (4) The characteristics of the brokers and/or execution venues to which that order can be directed; and (5) In the Firm s capacity as a UCITS management company, the objectives, investment policy and risks specific to the UCITS as indicated in the schemes prospectus or instrument constituting such funds. The execution factors relied on in respect of this instrument class were in line with the Firm s Best Execution Policy. 15
Close links, conflicts of interest and common ownership with respect to execution venues / brokers Close links The Firm has the following close links with two ofthe entities identified: Dimensional Fund Advisors LP: Dimensional Fund Advisors LP is the parent undertaking of the Firm. DFA Australia Limited: DFA Australia Limited is a subsidiary undertaking of Dimensional Fund Advisors LP, the parent undertaking of the Firm. Conflicts of interest Please see section headed General Disclosure under Equities Shares and Depositary Receipts above. In addition, the following potential conflicts of interest have been identified in respect of approved execution venues / brokers for this instrument class: Accounts and/or funds managed by the Firm may hold an interest in approved brokers or their affiliates, including, but not limited to, Citigroup Global Markets Limited and Goldman Sachs. The Firm or its affiliates may act as advisor or subadvisor to accounts managed by approved brokers or their affiliates, including, but not limited to, Citigroup Global Markets Limited, Goldman Sachs, Dimensional Fund Advisors LP and DFA Australia Limited. Approved brokers and/or their affiliates may invest in accounts and/or funds managed by the Firm or its affiliates. Approved brokers and/or their affiliates may provide certain other services (aside from brokerage services) to the Firm and/or its affiliates and/or the accounts / funds managed by the Firm or its affiliates, including, but not limited to, Citigroup Global Markets Limited. Certain approved brokers may have customised their technology to facilitate the Firm s trading process. Common ownerships The Firm has the following common ownerships with two of the entities identified: Dimensional Fund Advisors LP: Dimensional Fund Advisors LP is the parent undertaking of the Firm. DFA Australia Limited: Dimensional Fund Advisors LP, the parent undertaking of the Firm is also the parent undertaking of DFA Australia Limited. Close links These close links did not influence the Firm s selection of brokers or execution venues, as the orders were placed by such entities with third party brokers or execution venues, and not executed by the entities listed. Conflicts of interest The Firm does not believe the potential identified conflicts of interest influenced the quality of execution obtained by the Firm. The Firm seeks to prevent or manage conflicts in accordance with the Firm s Conflicts of Interest Policy. Broker selection was made in accordance with the Firm s Best Execution Policy. In particular, allocation of brokerage decisions was made consistently with the Firm s duty to seek best execution and not in view of sales or recommendations of the Firm s funds, strategies or services or any other services that a broker or its affiliates may provide to the Firm, its affiliates or the funds / accounts they manage. Common ownerships These common ownerships did not influence the Firm s selection of brokers or execution venues, as the orders were placed by such entities with third party brokers or execution venues, and not executed by the entities listed. 16
Specific arrangements with execution venues / brokers regarding payments made or received, discounts, rebates or non-monetary benefits received Factors leading to a change in the list of execution venues / brokers listed in the order execution policy Differentiation across client categories The Firm has no specific payment arrangements to report under the requirements applicable during the disclosure period (Note: MiFID II inducements rules were not in effect during the disclosure period). during the disclosure period as MiFID II rules were not yet in effect. The changes to the list of execution venues / brokers as a result of MiFID II will be reflected in the 2018 report. the Firm gives effect to decisions to deal on behalf of professional clients only (as defined in the FCA rules). The Firm evaluated payment arrangements in accordance with the requirements applicable during the disclosure period. Use of data / tools relating to quality of execution The Best Execution Oversight Committee of the Firm s Global Investment Committee periodically reviews execution quality across instrument classes, utilisinginternally developed and third party analytical tools and services. Reviews are conducted on explicit and implicit transaction costs. Reports from internal working groups that conduct additional transactional cost analysis throughout the year are also reviewed. The results of this analysis have proved to be in line with the Firm s expectations. Use of consolidated tape provider output Use of DEA The Firm has not used output from consolidated tape providers. 17